From Small to Systemic. The Multibillion-Euro Potential in Social Innovations.

Major waves are poised to rip through our society. Demographic shift, global mobility, urbanization, and digitization of the working world – our traditional perspective no longer suffices to answer all the questions raised. Yet we need solutions to these questions – socially and economically. 

Social entrepreneurs are among the people working to develop those solutions. Not only do they relieve the symptoms of social problems, they also remove the cause. Their entrepreneurial spirit, creativity, risk-taking, and persistence set them apart. 

"Social entrepreneurs are the essential corrective force. They are system-changing entrepreneurs. And from deep within they, and therefore their work, are committed to the good of all." – Ashoka founder Bill Drayton 

So how do social entrepreneurs manage to change systems? What stops them, and what drives them on? Just how much potential do their solutions really offer? 

To explore these and other questions, Ashoka joined forces with McKinsey & Company to conduct extensive interviews with some of Germany's 1,700 social entrepreneurs – as well as their partners in the respective systems. In the final analysis, we have taken four very different examples from the healthcare and education systems to demonstrate how social entrepreneurs are driving change: 

  • Discovering Hands is improving the early detection of breast cancer by utilizing blind women's especially keen tactile perception. 

  • Irrsinnig Menschlich [Insanely Human] advocates for the effective prevention of mental illness in schoolchildren through information, education, and reaching out to those affected. 

  • Apeiros helps identify truants early on and take appropriate countermeasures right away. 

  • Serlo Education developed a "Wikipedia for Learning" that facilitates more successful academic careers during which students can learn independently and at their own pace. 

Social entrepreneurs have enormous potential. Simply introducing nationwide breast cancer screening based on the Discovering Hands model would not only save many lives, it could positively impact our economy to the tune of EUR 80 to 160 million every year – in part due to lower treatment and follow-up costs. Our four chosen examples offer combined financial potential of at least EUR 1 billion per year. And that's just four out of the 72 social entrepreneurs currently under the Ashoka umbrella in Germany (Ashoka Fellows). So if our four cases represent the mean, then the financial potential of the social entrepreneurs in Ashoka's network alone is around EUR 18 billion per year. 

That said, not every new idea will go on to generate impact at this level. Most social entrepreneurs develop and trial their ideas locally, on a small scale. Moving into the next phase, they begin scaling up their approaches more broadly within existing systems (e.g., nationally or even internationally) and then securing their permanent integration. 

By no means has every social entrepreneur thus far actually succeeded in scaling their efforts. However, there are several things that patrons, system players, and the social entrepreneurs themselves can do to change this: 

  • Patrons need to make funding allocation and frameworks more flexible. There is a better alternative to financing short-term projects or project phases: foundations, banks, public institutions, and other sponsors can tie their support to the social entrepreneurs' reaching specific milestones of systemic impact, transferring existing solutions to system players, and/or concluding specific collaboration agreements with those same players. Furthermore, policymakers, in particular those at state and national level, could take a more deliberate approach to structuring legal frameworks and should be actively seeking conversations with social innovators. 

  • System partners need to improve cooperation. Federal ministries and local councils, charities and trade associations, statutory health insurers, youth welfare organizations, schools, colleges, and many other system players could specifically work with social innovators to realize promising ideas quickly and on the broadest possible scale. They could also, for example, use a "sandbox" approach (or like a Petri dish in a lab) when working with social entrepreneurs to test whether an idea truly has the potential to create system-wide impact. 

  • Social entrepreneurs need to grasp their potential impact and act accordingly. It's all about calculating, or accurately estimating, the overall impact that the respective approach can have on society once it has been scaled up. Armed with this knowledge, social entrepreneurs can reach out to policymakers, administrative bodies, and the nonprofit sector to present themselves much more clearly and with greater confidence – a mindset that social entrepreneurs in the US have long since adopted. Social entrepreneurs also need to describe the change they want to achieve in as much detail as possible, strengthen their own management skills, and actively trigger and get involved in shaping the political process.